Rates on New-Car Loans Rise

By Staff Writer April 03, 2018

Interest rates on new vehicle loans will hit their highest level since 2009 in March, marking the second straight month of sharp rate increases. According to the analysts at Edmunds, the annual percentage rate (APR) on new financed vehicles averaged 5.7 percent in March - compared to an average of 5.2 percent in February and 5 percent in January. This compares to 5 percent in March 2017 and 4.4 percent in March 2013.

Edmunds’ experts point to a significant decrease in zero-percent loans as a primary driver for this rise in the average. The percentage of zero-percent loans will drop to 7.4 percent in March compared to 11.4 percent in 2017, which Edmunds attributes to larger automakers shifting to different incentive structures to address slowing sales.

“The high interest rates right now may catch a lot of car shoppers off guard, especially if they qualified for a lower rate the last time they visited the dealership,” said Jessica Caldwell, Edmunds executive director of industry analysis.

Last modified on Tuesday, 03 April 2018 23:14

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